Market movers ahead

  • We expect Riksbanken to raise its policy rate from by 25 basis points to 0% at its policy meeting on Thursday despite a weakening economy.
  • We expect Norges Bank to signal an extended period on hold both verbally and via the new rate path.
  • The US-China trade talks will remain in focus, especially the mood between the two sides and the likelihood of a phase two deal in 2020, which we continue to see a 50% chance of happening next year.
  • Preliminary December PMIs in the US, Japan and Eurozone are likely to provide evidence of a slight pick-up in manufacturing activity.
  • On Thursday, we expect the Bank of Japan (BoJ) to keep quantitative and qualitative easing with yield curve control in place, with a strong easing bias if the economic outlook deteriorates.

Weekly wrap-up

  • The US and China look to have reached a phase-one deal, which, if confirmed, would support a gradual recovery in China and the global economy in 2020.
  • UK Prime Minister Boris Johnson won a big victory at yesterday’s elections, which sets up the UK to leave the EU by 31 January 2020.
  • The Fed meeting brought no surprises, as the Fed clearly signalled that it is firmly on hold over the coming year
  • The ECB meeting provided no policy changes, but launched a strategic review of the ECB’s mandate over the next year.

Full report in PDF.

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